Framework

Core competence

The question it answers

When a leadership team weighs moving into new businesses or markets, which of the firm's capabilities are hard to copy, valued by customers and worth protecting as the base?

Origin
Prahalad & Hamel, 1990
Diagram type
Decision flow
Level of analysis
Firm
Topics
Strategy & leadership
Chess knight on a glass compass, icon for strategy and leadership

Diagram

Core competence

  1. Access to many markets?Does the capability open access to a wide variety of markets?A single-product capability: narrow value.
  2. Contributes to perceived customer benefit?Do customers notice and pay for its contribution?An internal capability customers cannot see.
  3. Hard to imitate?Is the bundle of skills and technologies hard for rivals to copy?Easily copied: not yet a core competence.
Core competence

Pitfalls

Pitfall

Calling a 'technology' a core competence. Prahalad and Hamel mean an integration of skills, not a single product.

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Prahalad, C.K. and Hamel, G. (1990) ‘The core competence of the corporation’, Harvard Business Review, 68(3), pp. 79–91.No DOIhbr.orgSource page